Near-Term Headwinds Offset by Improved Auto Batteries Outlook; Maintaining Panasonic JPY 1,450 FVE

We have updated Panasonic’s earnings forecasts and maintained our fair value estimate of JPY 1,450, as positive and negative factors offset each other. Although we raise our revenue forecasts as a result of weaker Japanese yen assumptions, our operating income forecasts are lowered because of macro headwinds and upfront investments for rechargeable batteries. Meanwhile, we raise our long-term forecasts for the energy segment as the capacity ramp-up of rechargeable batteries is faster than we had anticipated. Our fair value estimate of JPY 1,450 corresponds to 5.4 times 2023 EV/EBITDA. Given the rally after the earnings announcement, we view Panasonic’s shares as currently slightly undervalued.